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One of the most notable moves in yesterday’s cabinet reshuffle was Prime Minister Malcolm Turnbull’s decision to merge the environment and energy portfolios, and hand them both to current energy minister Josh Frydenberg.
Often when two agencies are combined, the culture of one dominates. In this case, it will hinge on the agenda chosen by Frydenberg, Turnbull, and the government as a whole.
If the resource-oriented, centralised, growth-focused energy industry culture dominates, we could see emerging industries blocked, the climate response crippled, and environmental destruction.
On the other hand, if the various interest groups are forced to engage with the climate issue, and the abuse of market power, fossil fuel subsidies and other longstanding conflicts are worked through, it could be the circuit-breaker that’s so sorely needed.Tricky issues
One thing that’s clear is that Frydenberg has been given a remarkably complicated brief. Energy and environment are both great examples of “wicked problems” – issues so complex that we struggle to define the problems, let alone agree on how to deal with them.
For instance, one crucial aspect of Frydenberg’s existing energy portfolio relates to energy exports, which traditionally have represented a significant proportion of Australia’s overall exports. But a recent Productivity Commission report points out that services (which are typically low-energy) now make up more than 40% of exports from a “value-added” perspective.
Factor in environmental considerations and the prospect becomes more complex still (although a good energy minister will already be across these trends). Australia’s profits from fossil fuel exports create deficits for consumer countries as well as contributing to their carbon emissions. The global shift away from fossil fuels is a necessary and understandable response, which calls into question the long-term future of Australia’s energy exports.
But energy policy has other dimensions that are often more important to voters and the broader economy. Fair energy prices and reliable power supply are crucial for the community and business. The sector creates many environmental problems but can also help to improve environmental quality. It has traditionally underpinned economic development but employs few people and is capital-intensive – and our economy is decoupling its progress from dependence on energy growth.
The energy sector is also in deep crisis, with volatile and increasing electricity and gas prices, conflict over mining, and a war between proponents of emerging clean energy solutions and powerful energy companies.Need for vision
It all sounds daunting, but this is also a perfect time for someone with a broader perspective and wider experience to engage the many stakeholders, resolve tensions, and guide Australia towards a sustainable, 21st-century energy sector.
What can we surmise about the various figures who will influence this process? Turnbull is famously keen on innovation, and is comfortable with disruptive energy sources, being one of the 1.5 million householders with rooftop solar. And he was very excited after his ride in a Tesla electric car.
His chief of staff Drew Clarke has a strong background in industry development, energy efficiency and (the new buzz-phrase) energy productivity. Martin Parkinson, secretary of the Department of Prime Minister and Cabinet, is a former head of the environment department.
Frydenberg himself is one of the few recent Australian energy ministers not enmeshed in the traditional energy industry – a marked contrast to his predecessors Ian Macfarlane, Greg Combet and Martin Ferguson. His career has encompassed a broad range of interests, including finance, international affairs, back-room politics, sport, and even helping the print handicapped. Soon after his appointment as energy minister, he attended several international energy meetings, including an APEC energy ministers’ conference at which I spoke on the future role of clean energy. He seemed pretty interested.
After returning, he commented at a meeting of COAG’s Energy Council that energy efficiency seemed to be the big international agenda item. He has also presided over development of Australia’s National Energy Productivity Plan, and he has been an advocate for innovation.
So he seems to be ambitious, forward-looking and broad in perspective. However, as energy minister he has been reported as supporting a range of controversial energy development options, including new coal mines.
It remains to be seen whether this stance was part of Turnbull’s “calm the conservatives” strategy, or perhaps informed by a lack of exposure to up-to-date economic and scientific analysis. What does Josh Frydenberg really think? And if independent policy research contradicts his views, will he be prepared to change his mind?
Another important issue is who will be appointed to the department’s senior positions. This could have a crucial bearing on the outcome. Choosing the right people could guide a positive transformation that supports progress towards a truly sustainable energy and environmental future.
Alan Pears has worked for government, business, industry associations public interest groups and at universities on energy efficiency, climate response and sustainability issues since the late 1970s. He is now an honorary Senior Industry Fellow at RMIT University and a consultant, as well as an adviser to a range of industry associations and public interest groups. His investments in managed funds include firms that benefit from growth in clean energy.
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The transition to a clean energy future is upon us, as shown by the huge uptake of solar panels and by the Turnbull government’s decision to set up a A$1 billion Clean Energy Innovation Fund. But what about those people who are at risk of being left behind?
Our survey of lower-income households shows that information about low-carbon living is often difficult to access, and that assistance is sometimes misdirected.
As a result, transitioning to low-carbon living is much harder for these households than it should be.Listening to the people
Between December 2015 and June 2016, we held 23 focus group discussions with 164 lower-income households across eight metropolitan and regional centres in New South Wales, South Australia, Tasmania and the Northern Territory. Our aim was to try to understand the challenges these households face in transitioning to low-carbon living. This was part of a wider study, funded by the Cooperative Research Centre for Low Carbon Living, on finding ways to help poorer households reduce their carbon impact.
Almost everyone we spoke with supported the idea of low-carbon living. However, the ability to afford whiz-bang green technology – from expensive solar panels and battery systems right down to LED lightbulbs – is a big issue for these households.
Significant increases in energy costs since the late 2000s have added to this problem. In some states, bills have more than doubled in just the past six years.
While money is a key problem, it’s not the whole story, and there are ways to help. We have found a range of factors, besides affordability, that limit lower-income households’ ability to transition to low-carbon living.Finding reliable information
Not everyone is looking for a hand-out; many just want to know how they can help themselves become more energy-efficient.
A major barrier that cropped up time and again in our survey is accessing the “right” information. Many people get good tips about assistance programs through friends and family, or via charities like the Salvation Army (one of our in-kind project partners).
But outside these avenues, information is often only available online, and many of our participants said that they either can’t afford internet access at home or, more importantly, don’t know what to search for.
What little information trickles through is often hard to understand. The Tasmanian government, for instance, offers a range of concessions on power and heating bills for older people or those who need to run medical equipment at home. But the benefits are expressed in cents per day (the current electricity concession, for instance, is 132.557¢ per day), which can make them unnecessarily hard for customers to calculate. Eligibility criteria are also often complicated.
With access to government services increasingly being moved online, the process can become a confusing rigmarole for many people, while others may miss out entirely.Misdirected assistance
Most of the assistance programs available to lower-income households, such as Centrelink Utilities Allowances, are aimed squarely at providing financial relief.
States and territories also have their own rebate schemes to offer relief from rising energy costs. In NSW, for example, EAPA vouchers are designed to provide emergency and crisis relief.
But with lower-income households less likely to own their homes, they are often precluded from accessing programs to encourage green energy, such as solar panel rebates. This is a classic split incentive – the owner buys the panels (and gets the rebate) but the tenant gets the benefit (lower bills), making the owner less likely to invest.
This leads to the question of why rebates are not offered for using green energy, as well as for installing it.
“Green” criteria already exist in some other assistance programs. For example, the No Interest Loan Scheme, which helps lower-income households buy products such as whitegoods, now requires appliance to meet certain energy-efficiency standards.
The same principle could easily be used to help lower-income renters access electricity from cleaner energy sources.
Giving poorer households free home energy assessments is a good start, but they are focused purely on cutting energy consumption.Removing hurdles
The compounding impacts of energy bill increases mean that many lower-income households are doing it pretty tough. Forgoing comfort in not turning on the heater or air-conditioner is one thing, but skipping meals or medication (as many of our survey respondents do) can have significant impacts on health and well-being.
Unfortunately, lower-income households have been going without life’s essentials for far too long. Setting up assistance programs is a good start, but we need to make sure that those who need help are getting it.
Here are our five suggestions for making it happen:
Get the info out there. It’s important that people get the right information when they need it. Putting information online is great but it cannot be the only way – consideration must be given to those without internet access or who are less computer-literate.
Keep it simple. Information needs to be straightforward and clear. If it’s stuffed with jargon and confusing numbers, it can become self-defeating.
Support the support organisations. Charities like the Salvation Army and the St Vincent de Paul Society serve important roles within our community, but they too need our continued help, especially when funding is not keeping up with needs.
Get value for the public’s money. A billion-dollar public fund may sound like a big deal, but this is small fry compared to Australia’s A$878 billion annual domestic consumption expenditure. Nonetheless, it is a good start in heading towards the right direction. We just need to make sure it helps those who need it most.
Overcome personal pride. Asking for help is never easy, and that’s why so many lower-income families go without. Making sure that incentive programs reach the right people, in the right way, can dramatically improve their willingness to use them. Hopefully, in the long run, fewer families will need to go without.
Edgar Liu receives funding from the Australian Housing and Urban Research Institute, Cooperative Research Centre for Low Carbon Living, New South Wales' Department of Family and Community Services, PAYCE Communities, SGCH Ltd, South Australia's Department for Communities and Social Inclusion, and Strata Community Australia (NSW chapter).
Bruce Judd receives funding from the Cooperative Research Centre for Low Carbon Living, the Australian Research Council, and the Australian Housing and Urban Research Institute.
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